Susilawati v American Express Bank Ltd

JudgeChan Sek Keong CJ
Judgment Date27 February 2009
Neutral Citation[2009] SGCA 8
Docket NumberCivil Appeal No 140 of 2007
Date27 February 2009
Published date08 April 2009
Plaintiff CounselDavinder Singh SC and Bhavish Advani (Drew & Napier LLC) (instructed), Siraj Omar (Premier Law LLC)
Citation[2009] SGCA 8
Defendant CounselFrancis Xavier, Jerome Robert, Ho Hua Chyi, Dawn Wee (Rajah & Tann LLP)
CourtCourt of Appeal (Singapore)
Subject MatterDuties of agent,Duty on parties to effect proper discovery,Application for leave to raise and argue new point,Considerations which permeate court's exercise of discretion to grant leave to amend pleadings similar to those underpinning discretion to allow new point to be raised and argued on appeal,Section 47 Banking Act (Cap 19, 2003 Rev Ed),Application for leave to amend pleadings,Principles underpinning court's power to order new trial similar to those applicable when appellate court asked to hear new evidence,Whether appellant's informed consent sought,Whether in interests of justice for new point to be heard,Common features of fiduciary relationship,Disclosure of documents,Banking,Duty of frank and full disclosure by fiduciary,Secrecy,Applicable principles,Whether written acknowledgement necessary,Whether statutory exceptions provided under s 47 Banking Act (Cap 19, 2003 Rev Ed) exhaustive and whether room remained for general common law exceptions,Application for leave to adduce further evidence,Application for court to order new trial,Possible consequences of failure to comply with obligation,Agency,When retrial might be necessary in cases relating to failure to give proper discovery,Civil Procedure,When agency relationship might give rise to fiduciary duties,Appeals

27 February 2009

V K Rajah JA (delivering the grounds of decision of the court):


1 These proceedings originally centred on allegations of undue influence and breach of fiduciary duties levelled by the appellant, Mdm Susilawati (“the appellant”) against the respondent, American Express Bank Limited (“the respondent”). The appellant attempted to disclaim liability under a third-party charge which expressly made her responsible for losses incurred through her then son-in-law’s personal trading account with the respondent. After a four-day trial, the trial judge dismissed the appellant’s claim with costs.

2 The appellant appealed against the whole of the trial judge’s decision. However, she did not seek to challenge the trial judge’s findings of fact. Instead, the appellant sought this court’s leave to raise and press a new point that had neither been pleaded nor raised earlier. In addition to the substantive appeal, the appellant made three other applications:

(a) for the court to order a new trial on the issues raised by the appellant in the appeal;

(b) for leave to adduce further evidence; and

(c) alternatively, for leave to amend the pleadings.

3 It also bears mention, so as to shed some light on this unusual change of strategic tack, that the appellant was represented by different counsel for the appeal. At the end of the hearing, we dismissed all three applications as well as the appeal. We now set out in full the grounds of our decision.


4 The essential background facts have been carefully summarised in the High Court’s judgment but are now briefly reprised here for ease of reference (see Susilawati v American Express Bank Ltd [2008] 1 SLR 237 (“the GD”) at [2]–[6]).

5 The appellant is a wealthy Indonesian citizen who was married to a prominent Indonesian businessman until his demise in April 2002. Her late husband controlled a substantial Indonesian conglomerate known as the Gajah Tunggal group. Its business concerns comprise, inter alia, rubber remilling and supply of rubber tyres for vehicles and bicycles, commodities trading, hotels and, at one time, even the largest private commercial bank in Indonesia, known as Bank Dagang Negara Indonesia.

6 The respondent is a limited liability corporation incorporated in the United States of America, providing, inter alia, private banking services to high net-worth individuals in Singapore.

7 The appellant had been a customer of the respondent’s private banking division ever since 27 August 1997, when she opened an account (“the Account”). On or about 11 February 1998, the appellant executed a document entitled “Third Party Liabilities” (“the Charge”), under which she granted a charge in favour of the respondent over all moneys in the Account to secure the due and punctual discharge of all moneys, obligations and liabilities due from her then son-in-law, Tommy, to the respondent.

8 Between 1998 and 2005, Tommy incurred substantial debts to the respondent, which consisted of losses from foreign exchange transactions that he effected through his personal account with the respondent, as well as loans made to him by the respondent. It was only in the later half of 2005 when Tommy had defaulted and ran into problems servicing his loans that the appellant began to challenge the Charge. Pertinently, it was also around this time that the marriage between the appellant’s daughter, Zina, and Tommy ran into difficulty and fell apart.

9 By March 2006, Tommy’s personal liabilities to the respondent, including interest, had ballooned into a staggering sum of about US$17.4 million. As a result of Tommy’s inability to discharge his liabilities, the respondent eventually set off a sum of US$17,560,390.98 from the Account in accordance with the terms of the Charge. Not long after, the appellant commenced this action to recover a sum of US$17,500,605 from the respondent.

10 In the proceedings below, the appellant originally rested its claim on just two central planks:

(a) that Tommy had a relationship with the appellant of such a dominant nature as to give rise to a presumption of undue influence, and that her signature on the Charge had been procured by this undue influence; the respondent had actual or constructive knowledge of this, rendering the Charge void and unenforceable; and

(b) that the respondent had breached its fiduciary duties to the appellant, resulting in losses that entitled her to damages.

11 The respondent, on the other hand, maintained that:

(a) The appellant had executed the Charge freely, with the full knowledge that she was pledging the sums in her Account as security to cover Tommy’s liabilities.

(b) Alternatively, the appellant had affirmed the Charge by continuing to operate and make investments through the Account. This made it inequitable to set aside the Charge as the respondent, relying on the appellant’s acquiescence, had acted to its detriment by continuing to make available banking facilities to Tommy.

(c) Finally, it did not owe the appellant any fiduciary duties or, if it did, those duties were not breached.

The decision below

12 The trial judge dismissed the appellant’s claim with costs, holding that:

(a) The appellant had failed to show that she had reposed such a degree of trust and confidence in Tommy that could justify the inference that the Charge was executed whilst under his undue influence. The execution of the Charge was entirely explicable in the context of the family elements and relationships involved here. In particular, the appellant was family-oriented and close to her daughter. This provided the impetus for her to extend financial help to Tommy. The appellant was also fully aware of the effect and consequences of the Charge and had executed it freely.

(b) The private banking services afforded by the respondent to the appellant and the communications between them were not characterised by any inequality of bargaining power. The appellant had given very precise instructions to the respondent limiting Tommy’s ability to make investments on her behalf. For instance, her moneys could not be invested in shares, mutual funds or speculative trades. The respondent scrupulously adhered to these instructions. The parties were in essence transacting at arm’s length. Furthermore, there was neither advocacy directed at persuading the appellant to execute the Charge, nor any form of “overreaching” characterised by non-disclosure of material facts. In short, there was no issue of Tommy or the respondent having taken advantage of the appellant by virtue of their relationship. Finally, the standard terms and conditions of the private banking services arrangement between the parties clearly militated against the appellant’s allegations regarding the existence of a fiduciary duty.

13 The trial judge made one further observation, which was to form the crux of the appellant’s new cause of action in this appeal. According to the trial judge (at [72] and [76] of the GD):

72 To begin with, it struck me that the [respondent] was aware of the potential conflict of interest between Tommy (who was a remunerated referral agent for the [respondent]) and the [appellant], from the commencement of its relationship with the [appellant].

76 … [I]t cannot be seriously disputed that it was the [respondent’s] lack of vigilance that contributed in no small measure to the present dispute, which could easily have been avoided by closer scrutiny and more comprehensive disclosure on the part of the [respondent].

[emphasis added]

The appeal

14 Before us, the appellant sought to advance a completely new line of argument. She contended that:

(a) Tommy was an agent of the appellant and owed her fiduciary duties.

(b) Tommy had breached these fiduciary duties.

(c) The respondent, knowing that Tommy was the agent of the appellant, entered into a remunerated referral agency agreement with Tommy, or continued with that agreement. This created a conflict of interests and the respondent had failed to ensure that the appellant gave her informed consent to this prevailing conflict of interests.

(d) Consequently, the law should give precedence to the appellant’s interest over those of the respondent’s.

15 Central to the appellant’s case, that these new points be accorded leave to be canvassed during the appeal, was the manner in which purported new evidence had awkwardly emerged during the trial. It would therefore be helpful to briefly recount the events as they unfolded in the proceedings below, before delving further into the issues on appeal. The following account of events was not in dispute.

Referral agreement and the appellant’s written acknowledgement

16 Less than an hour before proceedings were adjourned on the second day of the trial, during the cross-examination of the respondent’s key witness, Mr Lim Chee Kong (“Mr Lim”), the relationship manager for the Account, the appellant’s former counsel confirmed that Tommy had received remuneration for recommending the appellant to the respondent. It was revealed that this agreement to remunerate Tommy was embodied in a document (“the Referral Agreement”), which the respondent had apparently failed to disclose prior to the trial. Discovery was immediately sought, and the Referral Agreement was promptly given to the appellant later that evening.

17 Towards the end of the third day of the trial, during the continued cross-examination of Mr Lim, it was revealed that the respondent had failed to obtain the appellant’s written acknowledgement that she had consented to this referral arrangement between the respondent and Tommy. On the morning of the fourth day, the witness phase of the trial ended.

18 Counsel for the appellant candidly acknowledged in their written submissions that the Referral Agreement could quite easily have been the subject of interlocutory applications during the discovery process. Given the concatenation of circumstances and the conduct of the cross-examination, it could...

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